Don't get in the way of this delivery truck.
on Tuesday delivered third-quarter earnings of 38 cents a share, beating Wall Street's expectations by a penny, and set a 2-for-1 stock split.
In what is becoming almost routine, the San Jose, Calif., company showed another great quarter, where earnings jumped 33% to $646 million on a pro-forma basis (excluding acquisition-related costs). Last year, Cisco recorded $484 million, or 30 cents a share in profits. Showing robust growth, Cisco revenue jumped 44% to $3.15 billion from $2.18 billion a year ago.
The stock split will be paid June 21 to shareholders of record May 24.
"I think there are very few quarters that were as smooth as this one," CEO John Chambers told analysts and investors on a conference call Tuesday evening. Sales grew 11% from the prior quarter, and day-sales outstanding -- a measure of the average time it takes a bill to be paid -- was reduced to 40 days from 48 days. Chambers said future orders exceeded sales billed.
Sales to telephone carriers and Internet service providers grew 70% from the prior year, and sales to corporations increased by 30%.
Last fall there were fears corporate customers would hold back their technology purchases to prepare their computer systems for Y2K. For Cisco, at least, there was no sign of a slowdown in purchases of networking equipment this quarter.
"The year 2000, while it will continue to be challenging, probably will not be as challenging as we thought two or three quarters ago," Chambers said.
For now, Cisco is gaining market share in selling to carriers, even though it may be
falling behind in certain technologies. Don Listwin, executive vice president at Cisco, says the company might lose business with carriers in one product area: core asynchronous transfer mode, or ATM, switching. Earlier this year, Cisco canceled its 8750 ATM switch -- employed to handle the highest flow of data traffic -- used by carriers like
. Listwin says Cisco will ship a replacement ATM product around the end of the year.
"All the numbers looked real good," says Craig Johnson, principal with
The PITA Group
consulting firm. "The challenge is still 12 to 18 months away." For example, Cisco needs a strategy to compete with telecom giants for the core of carrier networks in 2000 and beyond, says Johnson, who owns 500 Cisco shares.
Cisco investors can be happy that there were no slip-ups by this technology titan.